We live in the age of multiple global challenges. Global warming and pandemics are obviously interrelated problems that require a global response, but there is a less obvious one I can think of: Aging.
When it comes to aging populations, we think of Japan, where the number of centenarians has reached 80,000, but figures make it clear that the phenomenon is global. Turkey is also aging rather rapidly, and that may change many things here within a few decades.
There are two data points on aging populations: Rising life expectancy and declining fertility rates. Both are happening nearly everywhere.
When I was born in the early 1960s, life expectancy at birth in Turkey was around 46 years. Lower than the world average, mind you. By 2018, it was 77 years, higher than world average. Last week, the Turkish Statistical Institute (TÜİK) announced life expectancy figures for 2019. Turkish life expectancy has increased to 78.6 years and the fertility rate has dropped to 1.88. Looking at the numbers, one is struck by how strong the trend is.
What does that entail? First of all, there will soon be more Turks over 64 than below five years old. This trend will continue, and Turkey’s population, which is currently at 83 million, will not reach the 100 million mark. As the country approaches 2050, fewer schools and more elderly care centers are going to be needed. We will need fewer diapers with elephants and rainbows, and more adult-sized plain ones.
Second, population projections now indicate that the working age population is going to start declining between 2030 and 2050. This means that productivity levels will go down unless we engage in deep reforms. That also means growing savings until 2030 and lower interest rates. These things are all structurally determined.
Third, intergenerational relations will almost surely be a new source of tension. Lower interest rates are not good for intergenerational equality, since they help older people at the expense of the young. That’s how the financial system currently works. If you already have accumulated assets from a lifetime of work, you will enjoy deeper access to the financial system. Young people are going to struggle more, while big chunks of their taxes also go towards the welfare of the old. That is what we see happening in Europe, and there is no reason Turkey would be any different.
About 20 years ago, a major discussion in Turkey was about the demographic window of opportunity. This is the period in which the working-age population is rising, but the old cohort is still small – when the country has the benefit of an experienced, but youthful workforce without the burdens of old age. The idea is that countries should use this window of economic expansion to set itself up for the future – enact structural reforms and invest in education. What we didn’t know back then is that the world would be changing much faster than we envisioned. Wasting this window of opportunity is much more costly than we could have known in the 1990’s and 2000’s. Yet that is precisely what Turkey is doing, if you ask me.
Consider this: During the Spanish flu pandemic of 1918, the share of over 65-year-olds in the United States was around 8 percent. Now it is around 16 percent.
In Turkey today, the share of above 65-year-olds is around 8 percent today, and is projected to be around 16 percent in 2040. Just two decades. A demographic shift that took the United States a century will probably occur in Turkey over a decade.
Turkey will soon find out that life speeds up after a certain age, and before you know it, you’re out of time.
This commentary was published in Hürriyet Daily News on 19.09.2020
